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Myanmar: Asia’s Last Frontier for Automakers

Myanmar: Asia’s Last Frontier for Automakers

    自動車 | AUTOMOTIVE    
Myanmar: Asia’s Last Frontier for Automakers
Asia Pacific Plant Management Magazine JUNE-JULY 2014 Issue

Myanmar is said to be the last frontier in Asia and to have the potential for significant economic development; the automotive market is no exception. Since Myanmar opened itself up to the outside world in 2011, the country seems to be the newest market for automakers. Even though used vehicles constitute 99% of domestic car sales in Myanmar, global automotive giants are present or planning to have a presence in the country with an eye to gain future market share.

The Automotive Market in Myanmar

According to the Road Transportation Administration Department (RTAD), there are 3.8 million registered vehicles in Myanmar as of July last year. Motorbikes account for around 85%, which are mainly Japanese and Chinese brands, while most cars are second hand, mainly brought in from Japan. However, experts believe that the market holds a high potential for further growth in the long term.


In September 2013, Frost & Sullivan released a report titled “CEO 360 Degree Perspective of the Automotive Market in Myanmar.” The report estimates the automotive market in Myanmar will witness a compound annual growth rate (CAGR) of 7.8% from 2012 to 2019, led by infrastructure development, a developing economy and rising income due to greater integration with the rest of the Asean nations, with actual growth expected to commence after 2014. Especially, Dushyant Sinha, associate director, Automotive Practice, Asia Pacific at Frost & Sullivan, said that a promising potential car buyer group in the long term originates from the young workforce with a significant two-wheeler ownership. However, Dushyant also notes that factors such as inappropriate road infrastructure, an underdeveloped automotive service market, high car prices, and unpredictable changes in regulations may hinder the potential development of the market.


Dushyant sees Japanese automakers dominating the passenger vehicle market even in 2019. According to him, Honda, Suzuki and Nissan will be particularly popularbrands due to them offering compact cars that are attractive to people in Myanmar. He also sees South Korean and Chinese automakers increasing their presence due to offerings of more affordable cars and compact engines cars than their Japanese counterparts. Nevertheless, Dushyant sees that the presence of European and the US automakers will be limited due to the limited availability of sales & service support, especially spare parts.


Automakers Eye Automotive Market in Myanmar

Untitled-2Against this backdrop, foreign automakers are aiming to increase their presence in Myanmar to make the most of the opportunities available in the country. For example, Nissan Motor, in partnership with Tan Chong Motors (Myanmar), aims to be the first global automotive manufacturer in Myanmar following the market opening in 2011. Tan Chong Motors (Myanmar) aims to set up their first assembly plant in the Bago region in 2015, which will manufacture the Nissan Sunny with a production capacity of over 10,000 vehicles per year.


Chery, a Chinese automaker, started the assembly of its first vehicles in Myanmar in June 2013, with an estimated annual production capacity of 3,000 to 5,000 units. Furthermore, in May last year Mitsubishi Motors set up its first showroom with a consortium of four companies. The company also plans to open service centers in Nay Pyi Taw and Mandalay in the near future. Finally, last October Volkswagen opened its first service center in Yangon through a partnership with Yoma Strategic Holdings. Other foreign automakers, especially those of Japan, South Korea, China, India, the US and Europe, are also working to gain market share in Myanmar.


Since the automotive market in Myanmar is just started to develop, finding a reliable local partner in the country will be key for the success of foreign automakers, as local counterparts understand the uniqueness of the market and consumer behavior. In the long term, foreign automakers are also required to educate the automotive market in Myanmar regarding the importance of after-sales services through genuine channels, including the use of genuine automotive parts and/or by coming to authorized automotive service centers.



Since Myanmar opened itself up to the outside world in 2011, the automotive market has been one of the sectors that has gathered the most attention. Due to the easing of regulations and growing investments by foreign automakers, the outlook for the Myanmar automotive market seems positive. In fact, the automotive market in Myanmar is comparatively small compared to that of other Southeast Asian countries and used cars as well as entry-level vehicles are expected to continue to dominate the market. Yet, the market is expected to grow in the coming years and present opportunities for foreign automakers.



Myanmar, Asia’s Last Frontier for Automakers 2ミャンマーの自動車市場



フロスト&サリバンは2013年9月、市場調査報告書「ミャンマーの自動車市場: CEOの全方位的展望」を発表しました。報告書では、ミャンマーの自動車市場が、インフラ整備、経済成長やASEANへのより深い統合による人々の所得向上などにより、2012年から2019年にかけて、年平均成長率7.8パーセントを達成すると述べられています。また、実質成長は、2014年以降に見られると予測しています。フロスト&サリバンアジア・パシフィックで、自動車分野のアソシエートディレクターを務めるデュシヤント・シンハ氏は、オートバイの保有率が高い若年労働者層が、長期的な4輪車の有望な潜在購買層だと述べています。ただ、不十分な道路インフラ整備やアフターサービス市場、高い自動車価格や予想外の規制変更などは、同国の自動車市場の潜在的成長を妨げるかもしれないとも述べています。













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